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  • Writer's pictureJatin Agarwal

ESAF Small Finance Bank IPO


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ESAF Small Finance Bank IPO: A Lucrative Investment Opportunity for the Long Term



Company Overview

ESAF Small Finance Bank (ESAF SFB) is a Kerala-based small finance bank (SFB) that provides a range of financial services to micro, small, and medium-sized enterprises (MSMEs), as well as underbanked and unbanked individuals. The bank has a strong track record of growth and profitability, and is well-positioned to benefit from the growing demand for financial services in India.


Growth Opportunities

  • Expanding branch network: ESAF Small Finance Bank plans to expand its branch network from the current 476 branches to 800 branches by FY25. This will help the bank to reach more customers and expand its market share.

  • Growing digital footprint: ESAF Small Finance Bank is also investing in its digital capabilities to make it easier for customers to access its services. The bank has launched a number of digital initiatives, such as a mobile app and internet banking platform.

  • Focus on asset quality: ESAF Small Finance Bank has a strong focus on asset quality. The bank's gross non-performing assets (NPAs) as of June 30, 2023, were just 1.32%, one of the lowest in the SFB sector.

IPO Details

  • IPO Dates: November 3-7, 2023

  • Listing Date: Tentatively November 16, 2023

  • Promoter Holding Pre-IPO: 79.7%

  • Promoter Holding Post-IPO: 69.7%

  • Lot Size: 250 shares

  • IPO Price Band: ₹57-60 per share

Grey Market Premium

ESAF Small Finance Bank's shares are trading at a premium of ₹10-20 in the grey market, which indicates strong demand for the issue from investors.


Valuations

At the upper end of the price band, ESAF Small Finance Bank is valued at a P/B of 1.8 times and a P/E of 15.2 times. This is at a discount to the average valuations of its peers.


Other Useful Information

  • Book-running lead managers: ICICI Securities, DAM Capital Advisors, and Nuvama Wealth Management

  • IPO registrar: LinkIntime India

Crisp Insights:

  • ESAF Small Finance Bank IPO GMP Today: The Company is commanding a GMP of 30%.

  • ESAF Small Finance Bank GMP is good and hence, it will list at a premium.

  • ESAF Small Finance Bank IPO Review: ESAF Small Finance Bank is a well-managed small finance bank with a strong track record of growth and profitability. The bank is well-positioned to benefit from the growing demand for financial services in India. The IPO is priced attractively and offers investors a good opportunity to invest in a high-growth sector.


Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.

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